Article 26 - Adjustments for Insurance Companies

A Constituent Entity located in the Kingdom that is an insurance company shall make the adjustments in accordance with Paragraphs B, C, D and E of this Article for the purposes of determining its Constituent Entity Income or Loss.

The Constituent Entity shall exclude any amount charged to policyholders for taxes paid by the insurance company in respect of returns to the policyholders.

The Constituent Entity shall include returns to policyholders that are not reflected in its Financial Accounting Net Income or Loss to the extent that the corresponding change in liability to the policyholders is reflected in its Financial Accounting Net Income or Loss.

The Constituent Entity shall not deduct any expense related to the movement in its reserves where both of the following apply:

1. Such movement economically matches an Excluded Dividend, net of any investment management fee.

2. The dividend income is derived from a security held by the insurance company on behalf of a policyholder.

The Constituent Entity shall not deduct any expense related to the movement in its reserve where such movement relates to an Excluded Dividend or to an Excluded Equity Gain or Loss derived from a security held by the insurance company on behalf of a policyholder.